How Much Are the Fees When Buying a Co-op Apartment in NYC?

The fees associated with buying a co-op apartment in New York City are approximately 1% to 2% of the purchase price. This is actually quite low for NYC as far as closing costs are concerned. Closing costs for condos and houses are much higher, typically around 3.5% to 4% if you’re financing. And buyer closing costs for new construction condos can reach up to 6%!

Visit https://hauseit.com to learn how to save money if you’re buying or selling a co-op, condo or townhouse here in NYC.

So, we now know that the total fees you’ll need to pay when buying a co-op are between 1% and 2% of the purchase. What does this consist of?

NYC Buyer Closing Cost Calculator: https://www.hauseit.com/closing-cost-calculator-for-buyer-nyc/

This calculator gives you an itemized breakdown of all buyer closing costs so you can better understand the big picture when it comes to the costs of buying a home in NYC. The link is below in the description.

The first item is the Mansion Tax. This is by far the largest closing cost. However, the good news is that it only applies if your purchase price is $1 million or more. For purchases of $1 million or more and below $2million, the Mansion Tax is 1% of the entire purchase price. If you’re fortunate enough to have a budget above $2 million, please keep in mind that there are 7 additional Mansion Tax brackets.

NYC Mansion Tax Rates & FAQ: https://www.hauseit.com/nyc-mansion-tax/

The highest rate of 3.9% applies to purchases of $25 million or more. Please check out our dedicated article on the NYC Mansion Tax for more information. We also have a dedicated Mansion Tax Calculator on our website, hauseit.com The links are below in the description.

Moving along, the next closing cost is the buyer attorney fee.

The average real estate attorney fee for a purchase or sale transaction in NYC is flat rate of $2,000 to $4,000. Lawyer fees can be as high as $5,000 for a more complex transaction and for new developments. There are also light-touch, discount lawyers available who charge flat fees as low as $800. Check out our website for more information on real estate legal fees in NYC as well as what questions to ask when interviewing attorneys.

Moving along, the next items consist of the move-in deposit, board application fees and the move-in fee. These vary by co-op building. In general, expect an application fee of at least $500. There may also be a separate credit check fee for each applicant.

Quick question: Are Co-op Application Fees Refundable If I'm Rejected?

Well, the application fee itself is typically non-refundable. After all, the building’s management company did render a service by processing your board package. This is also the case for any credit check or criminal background check fees. That being said, the building will usually return your move-in deposit and move-in fees in the event your application is rejected, since you’re not going to be moving in!

Next up, we have the lien search fee.

A coop lien search, otherwise known as a cooperative apartment lien search, is ordered by the buyer’s attorney after a purchase contract has been signed. Any outstanding liens against the seller or the coop apartment must typically be cleared by the seller before a closing can happen.

This search will be critical to ensure that there aren’t any outstanding tax liens, mechanics’ liens, bankruptcies or other violations and judgments you should know about.

Last but not least, we have financing related costs. Mortgage related costs consist of a loan application fee, appraisal fee, bank attorney fee, a recognition agreement fee and the UCC-1 filing fee. All in, mortgage related fees for a co-op are pretty low and quite reasonable.

The good news about buying a co-op instead of a condo is that you’ll be spared from the Mortgage Recording Tax. This massive closing cost ranges from 1.8% to 1.925% of the loan size for condos.

NYC Mortgage Recording Tax Calculator: https://www.hauseit.com/nyc-mortgage-recording-tax-calculator/

Fortunately, the Mortgage Recording Tax is not applicable to co-op apartments in NYC. This is because the tax only applies to mortgage debt on real property, and co-ops are not technically considered to be ‘real property.’

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